Sri P Bhudeva Reddy , Bangalore V. The Income Tax Officer Ward-5(3)(1), Bangalore

ITA 2677/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2435 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN SHRI GURUPRA
• Keywords: Unexplained cash credit; Salary income
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO. 2677 /BANG/201 8 ASSESSMENT YEAR : 20 08 - 09 SHRI. P. BHUDEVA REDDY, #14, 6 TH A MAIN, 3 RD CROSS, TALACAUVERY NAGAR, BYATANARAYANAPURA POST, BELLARY ROAD, BANGALORE 560 092. PAN : AAXPR 7421 F VS. THE INCOME TAX OFFICER, WARD 5(3)(1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SHRI. GURUPRASAD B. L, ADDL. CIT DATE OF HEARING : 11 . 10 .201 8 DATE OF PRONOUNCEMENT : 14 . 1 1 .201 8 O R D E R PER JASON P BOAZ, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-12, BANGALORE DATED 2.7.2018 FOR ASSESSMENT YEAR 2008-09. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: 2.1 THE ASSESSEE, AN INDIVIDUAL DERIVING INCOME FROM SALARY RECEIVED AS MANAGER OF M/S. COTTON WORLD, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 22.7.2008 DECLARING TOTAL INCOME OF RS.3,84,759/-. THE ASSESSEES CASE WAS TAKEN UP FOR SCRUTINY IN THE YEAR UNDER CONSIDERATION. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ITA NO.2677/BANG/2018 PAGE 2 OF 5 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF CASH DEPOSITS MADE IN HIS BANK ACCOUNTS WITH KARUR VYSYA BANK AND AXIS BANK, WHICH WAS FURNISHED TO THE ASSESSING OFFICER (AO). THE AO WAS NOT CONVINCED WITH THE EXPLANATIONS PUT FORTH BY THE ASSESSEE IN RESPECT OF CERTAIN CASH DEPOSITS TO THE EXTENT OF RS.1,25,700/- AND ACCORDINGLY CONCLUDED THE ASSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 13.12.2010, WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.5,10,640/- ON ACCOUNT OF THE ADDITION OF UNEXPLAINED CASH CREDITS IN HIS BANK ACCOUNTS AMOUNTING TO RS.1,25,700/-. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 13.12.2010 FOR ASSESSMENT YEAR 2008-09, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A)-12, BANGALORE. THE CIT(A) DISMISSED THE APPEAL VIDE ORDER DATED 2.7.2018 HOLDING THAT THE ASSESSEE HAD NOT FILED ANY EVIDENCE FOR PROVING THE SOURCE OF THESE CASH DEPOSITS. 3. THE ASSESSEE, BEING AGGRIEVED BY THE ORDER OF THE CIT(A)-12, BANGALORE DATED 2.7.2018 FOR ASSESSMENT YEAR 2008-09, HAS FILED THIS APPEAL BEFORE THE TRIBUNAL, WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.1,25,700/- BEING THE AGGREGATE OF THE DEPOSITS MADE IN THE BANK ACCOUNT FROM OUT OF EARLIER WITHDRAWALS FROM THE BANK ACCOUNTS, WHICH WERE MADE TO MEET THE EMERGENCY MEDICAL NEEDS OF THE APPELLANT'S MOTHER-IN-LAW, WHICH ON REIMBURSEMENT CAME TO BE RE-DEPOSITED IN THE BANK ACCOUNTS. THE REJECTION OF THE EXPLANATION IS UNREASONABLE AND IS PURELY OUT OF SUSPICION AND SURMISE, ASSUMPTIONS AND PRESUMPTIONS AND ACCORDINGLY VITIATED. ITA NO.2677/BANG/2018 PAGE 3 OF 5 3. WITHOUT PREJUDICE TO THE ABOVE, EVEN IN EXTREME CASE OF REJECTION OF EXPLANATION, THE LEARNED A.O. OUGHT TO HAVE TAKEN THE PEAK OF THE DEPOSITS OF THE BANK ACCOUNT AND AFTER GIVING CREDIT TO THE DEPOSITS BY WAY OF SALARY, ETC., AND THE INCOME RETURNED INSTEAD OF THE AGGREGATE OF SUCH BANK DEPOSITS IN THE BANK ACCOUNTS. 4. THE ADDITION IS PURELY ON SUSPICION AND SURMISE, ASSUMPTION AND PRESUMPTIONS AND REQUIRES TO BE DELETED. 5. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTERESTD-2-34 - - -- -B OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO BE CANCELLED. 6. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 4. GROUND NOS. 1 AND 6 BEING GENERAL IN NATURE, AND NOT URGED BEFORE US, ARE DISMISSED AS INFRUCTUOUS. 5. GROUND NOS. 2 TO 4: UNEXPLAINED CASH CREDITS 5.1 IN RESPECT OF THESE GROUNDS (SUPRA), IT WAS ARGUED BY THE LEARNED AR THAT THE ASSESSEE IS ONLY AN EMPLOYEE EARNING INCOME FROM SALARY AND THAT IN THE YEAR UNDER CONSIDERATION HAD MADE CASH WITHDRAWALS FROM HIS BANK ACCOUNTS TO THE EXTENT OF RS.3,20,900/-. ACCORDING TO THE ASSESSEE, THESE WERE CASH WITHDRAWALS MADE FOR MEETING THE MEDICAL EXPENDITURE OF HIS MOTHER-IN-LAW WHO WAS SUFFERING FROM CANCER. IT IS CLAIMED THAT THE ASSESSEES FATHER-IN-LAW (A FORMER LECTURER), A RETIRED GOVERNMENT SERVANT USED TO RETURN CASH AND THE SAME WAS BEING RE-DEPOSITED IN THE ITA NO.2677/BANG/2018 PAGE 4 OF 5 ASSESSEES BANK ACCOUNTS. THE ASSESSEE POINTED OUT THAT HE HAD ALSO FURNISHED EVIDENCE BEFORE THE AUTHORITIES BELOW TO SHOW THAT HIS FATHER-IN-LAW DREW PENSION FROM THE GOVERNMENT OF RS.9,150/- PER MONTH IN THE PERIOD RELEVANT TO THE YEAR UNDER CONSIDERATION AND HAS ALSO IN THAT PERIOD RECEIVED RS.5,74,254/- ON COMMUTATION OF PENSION (COPIES AT PAGES 5 TO 20 OF PAPER BOOK). IT WAS CONTENDED THAT THESE EVIDENCES WERE BRUSHED AWAY BY THE AUTHORITIES BELOW AS NOT BEING SUBSTANTIAL ENOUGH TO SUPPORT THE SOURCE OF THE CASH CREDITS IN QUESTION. 5.2 PER CONTRA, THE LEARNED DR FOR REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5.3 HAVING CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE MATERIAL ON RECORD, I FIND THAT THE ASSESSEE IS ONLY A SALARIED EMPLOYEE AND APPARENTLY DOES NOT CARRY ON ANY BUSINESS OR PROFESSION. HIS SOURCE OF INCOME AS BEING ONLY FROM SALARY TO THE EXTENT OF RS.5,99,045/- IS NOT DISPUTED BY THE AUTHORITIES BELOW AND AS PER THE COPIES OF BANK ACCOUNTS/STATEMENTS EXAMINED BY THE AUTHORITIES BELOW, THERE ARE CASH WITHDRAWALS TO THE TUNE OF RS.3,20,900/- THEREFROM IN THE YEAR UNDER CONSIDERATION. THE ASSESSEES CONTENTION IS THAT THE AFORESAID CASH WITHDRAWN WAS FOR THE MEDICAL EXPENSES OF HIS MOTHER-IN-LAW AND LATER BEING RECEIVED BACK FROM HIS FATHER-IN-LAW WAS RE-DEPOSITED IN HIS BANK ACCOUNT. THE ASSESSEES FATHER-IN-LAW, A RETIRED GOVERNMENT PENSIONER, FROM THE DETAILS FILED ALSO SEEMS TO BE A MAN HAVING THE MEANS TO REPAY THE SAID AMOUNT OF CASH OF RS.1,25,700/- DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNTS. IN THE FACTUAL MATRIX OF THE CASE ON HAND, AS LAID OUT ABOVE, THE EXPLANATIONS/DETAILS FURNISHED BY THE ASSESSEE APPEARS TO BE BONAFIDE AND ACCEPTABLE. IN MY CONSIDERED VIEW, THERE IS NO REASON TO SUSPECT THE GENUINENESS OF THE ASSESSEES CLAIM SINCE THE EXTENT OF CASH WITHDRAWALS FAR EXCEED THE CASH DEPOSITS MADE, EVEN IF FOR SOME REASON THE VERSION OF THE ASSESSEE HAVING RECEIVED MONEY FROM HIS FATHER- IN-LAW HAS TO BE DISBELIEVED. IN THIS VIEW OF THE MATTER, THE ADDITION MADE IN THE ORDER ITA NO.2677/BANG/2018 PAGE 5 OF 5 OF ASSESSMENT OF RS.1,25,700/- AS UNEXPLAINED CASH CREDITS, IS DELETED. CONSEQUENTLY, GROUND NOS. 2 TO 4 OF ASSESSEES APPEAL ARE ALLOWED. 6 . GROUND NO. 5 CHARGE OF INTEREST U/S 234A AND 234B OF THE ACT 6.1 IN THIS GROUND, THE ASSESSEE DENIES HIMSELF LIABLE TO BE CHARGED INTEREST U/S 234A AND 234B OF THE ACT. THE CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY AND THE ASSESSEE HAS NO DISCRETION IN THE MATTER. THIS PROPOSITION HAS BEEN UPHELD BY THE HONBLE APEX COURT IN THE CASE OF ANJUM H. GHASWALA IN 252 ITR 1 (SC) AND I THEREFORE UPHOLD THE ACTION OF THE AO IN CHARGING THE SAID INTEREST. THE AO IS HOWEVER DIRECTED TO RE-COMPUTE THE INTEREST CHARGEABLE U/S 234A AND 234B OF THE ACT, IF ANY, WHILE GIVING EFFECT TO THIS ORDER. 7. IN THE RESULT, ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF NOVEMBER, 2018. SD/- SD/- BANGALORE. DATED: 14 TH NOVEMBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. (SUNIL KUMAR YADAV) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER